Categories
Brazil

A Brief History Of The Price of Coffee

“A lot of people like snow. I find it to be an unnecessary freezing of water.”

Carl Reiner

This story begins in Brazil.

Snow has accumulated on the ground in the coffee growing regions of southeastern Brazil precisely as often as measurable snow has been recorded in the city of Los Angeles over the last 100 years: Three times. While there are few Angelenos alive who might remember the freak snow-storm of 1932 that caused riots when police tried to quell spontaneous snowball fights among college students, many Brazilians must remember when snow dusted the coffee farms of Parana and Sao Paulo over two days in July of 1975.

Both were virtually unprecedented weather events. One caused several accidents, a handful of arrests, and the disruption of business-as-usual for a few days. The other—a snow so unremarkable as snow it is remembered instead as a wholly remarkable frost, a “black frost” that destroyed 1.5 billion coffee trees—contributed to the retail price for roasted coffee in the U.S. reaching $4.19 a pound in the Spring of 1977. That’s over $19.00 a pound in 2022 dollars.

Prior to the black frost, green coffee had been trading on the C-market at an average of 53 cents over six months. It’s worth pointing out, repeatedly, the equivalent in 2022 dollars if for no other reason than to demonstrate how far out of whack our green coffee price expectations are these days relative to history. A 53 cent market, the equivalent of $2.75 today, was considered low in 1975 and not an insignificant drop from the 67 cent average for 1974.

The frost was a day old when a light snow began to fall in Brazil on Thursday July 17, 1975, continuing through Friday. The C-market went from 57 cents to 59 cents. No big deal. The market had flirted with 60 cents several times in previous weeks and though it’s entirely probable that rumors of frost had reached ears in New York, market players were then—as they are now, and have been for well over 100 years—hyper-skeptical about weather reports from the largest country in South America. But every now and then, around 15% of the time, the frost really was as bad as reports might indicate. On rare occasions, three or four times in a century, the frost was really bad. In the week following cold weather, when coffee climbed from 61 cents to 81 cents, eyebrows were raised but few were yet listening for howls on the wind.

The C-market averaged 82 cents a pound green for the rest of 1975, $4.25 today, the highest relative prices in a decade but not yet beyond the ability to adjust for most coffee roasters. As early as August 4th large roasters had increased wholesale prices by 20 cents per pound, but coffee growing countries, many of whom had sent inspectors to Brazil, were racing ahead, raising minimum export prices by over 30 cents per pound across the globe.

After touring Brazilian coffee farms in early August 1975, the president of El Salvador’s Coffee Institute practically blasphemed when he presciently suggested the floor price for green coffee should advance to $1.00 per pound.

Without pausing to acknowledge the highest relative prices in 20 years and a historic first, triple digits, green coffee prices did eventually roll relentlessly passed $1.00 in March of 1976 behind predictions that the upcoming Brazilian harvest would be, at best, 9 million bags, almost half the pre-frost expectation. Worldwide production was expected to be 48 million bags against a demand of 55 million bags.

When green coffee prices hit $1.20 on April 13, 1976, they ran out of vertical space on the giant wall-high board that tracked prices in the New York offices of the Colombian Coffee Federation. Prices had literally hit the ceiling. Coincidentally, and perhaps conveniently, $1.20 was the price at which the Federation wanted producers (or whoever was making the money) to stop spending their profits and start saving in order to avoid fueling inflation.

Green prices spent the next year, almost to the day, marching mercilessly from $1.00 to $3.00 a pound. On March 22, 1976, coffee traded at $1.02. On March 16, 1977, coffee traded at $3.02. And just to continue belaboring the inflation, that’s $5.27 and $15.60 in 2022 dollars, respectively. Per pound. Green. Major coffee brands were forced to raise prices so frequently, sometimes twice in the same month, they ran out of ways to spin the increases and often sounded flummoxed. When a spokesperson for Folgers declared in November 1976 that a recent price increase was small compared to the rising price of green coffee, you can almost hear the rock-and-a-hard-place frustration when he added, “We are not keeping up with the green‐bean market in these price increases.”

Consumers were paying less than a dollar for a pound of roasted and ground coffee in 1970. So, a reasonable price expectation, given inflation, would have been to pay around $1.30 in 1977 (they were paying around $1.20 over the summer of 1975). Instead, coffee drinkers were being asked to pay more than three times that amount. Given that many coffee drinkers didn’t even know that coffee grows on trees and is subject to the whims of nature, they started to rebel long before retail prices approached $4.00.

On December 27, 1976, New York City’s Commissioner of Consumer Affairs, Elinor Guggenheimer, held a press conference inside a restaurant and declared, by way of protest, that she was giving up her 14 cups of coffee a day to become a tea drinker. For emphasis and optics, she drank some tea right there in front of the photographers. She called for a 50% reduction in the retail price of roasted coffee, which was averaging $2.55 a pound at the time. The day of the press conference green coffee was trading at $2.21, having risen 10 cents in five days. Taking into account the replacement costs for coffee that traders and roasters had already purchased at lower prices, the commissioner was in effect demanding that everyone on the consumption-side of supply sell their coffee at a loss. Guggenheimer’s calls to “Boycott Coffee,” complete with buttons conveying that unambiguous message, would grow as prices continued to do the same. But market forces ignored the consumer-protection fervor.

“We’ve heard all about the cold weather in Brazil and the damaged coffee trees. What we haven’t heard is any valid explanation of why the consumer should be forced to bear the full impact of this frost.” 

Elinor Guggenheimer

The Commissioner was not the first, nor the last, public voice to either misunderstand or simply ignore how the coffee supply chain functioned to score rhetorical points. One green coffee trader, called to testify before the New York State Assembly Committee on Consumer Affairs in 1976, openly dismissed the questions he was being asked as a “joke,” saying the committee members lacked a basic understanding of commodities markets.

Of course, the “valid” explanation Guggenheimer was looking for—following the false assumption that consumers were being asked to “bear the full impact of the frost”—was on spot coffees and futures contracts being drawn in that moment, even if traders took zero margin on sales to roasters. In turn, roasters took zero margin on sales to retailers, and retail prices would still be around 40% higher than her arbitrary demand.

In February 1977, prices were still a tank rolling uphill, slowed only by a 6 cent daily limit imposed by The New York Coffee and Sugar Exchange, when New York Times columnist William Safire blustered that Brazil was simply ripping America off. He wrote that President Carter “should pointedly serve tea” at his first state dinner. There were ugly rumors that some coffee drinkers were actually considering tea. Congress held hearings on coffee prices for the first time in 20 years. People put their leftover brewed coffee in the refrigerator. Some people even reused spent grounds. The horror.

From January 1976 to January 1977 overall consumption of coffee fell by 15% in the U.S. and grocery store sales of coffee dropped by a similar percentage. Between June 1976 and June 1977, when prices finally started to trend downward, output among coffee roasters had fallen by more than 35%.

As consumers were paying the 2022 equivalent of $19.00 for a pound for not-specialty roasted coffee, roasters were paying prices for green coffee based on a C-market equal to $15.00 a pound (over $3.00 at the time). But Safire, Guggenheimer, and various elected representatives were wrong to think Brazil was the only cause or the cure. The old bromide that when Brazil sneezes the coffee world gets a cold is absolutely true. A common cold. When the symptoms are more severe, like the equivalent of $15.00 a pound for green coffee, there must be other factors involved. Snow and frost in Brazil definitely deserved top billing, but much like recent times, it was unmistakably an ensemble of events that conspired to truly tighten ready supply.

The same summer that one half to two-thirds of the coffee trees in Brazil died, a brutal civil war broke out in Angola on the heels of independence from Portugal. We don’t think of Angola as a coffee origin today because the country only grows around 200,000 bags annually. But prior to the outbreak of civil war in 1975, Angola produced over 4 million bags of coffee each year and was among the top five exporters in the world. Production dropped by 3 million bags almost overnight as coffee growers of Portuguese decent fled the country. Within just a few years, exports declined by 97%.

In August of 1975, as U.S. green coffee prices slowly began to respond to July’s weather in Brazil, Ethiopian emperor Haile Selassie died after six months of imprisonment following what amounted to a military coup. Civil war broke out among several factions and in 1976 the government responded with a wide-spread repression campaign known as the Red Terror, escalating the violence in 1977. In 1976 Ethiopia exported over 1.2 million bags of coffee. In 1977, exports were cut in half to less than 600,000 bags.

Adding fuel to the fire, Kenya experienced ongoing unrest following the murder of outspoken government critic JM Kariuki in 1975, which included a dock workers strike. On February 4, 1976, Guatemala experienced a devastating 7.5 magnitude earthquake in the middle of harvest season. The earthquake combined with bad weather throughout the region and rust disease in Nicaragua to cut Central American coffee exports by one-third that year. By 1977, the shocking human rights abuses in Uganda, where coffee exports were helping make Idi Amin a wealthy dictator, could no longer be ignored. Despite high prices and the anticipation of tight supply, major brands like Folgers suspended coffee purchases from Uganda. Colombia experienced flooding and a massive landslide in 1974 that would have long-term impacts on transportation infrastructure. In Japan, coffee had jumped from a dim blip on the world-wide consumption radar in 1972 to 6% in 1976.

As critical as these events and the cold weather in Brazil was the fact that world-wide coffee consumption had been exceeding production totals for most of the decade before 1974, meaning coffee producing countries were dipping into stockpiles annually to meet demand. While U.S. consumption had dropped 15% over the same period (due largely to drops in quality among major brands engaged in race-to-the-bottom price wars that required corresponding deep cuts in quality), this was more than offset by increased consumption in Japan and Europe, where coffee drinkers were happy to pay as much as the 2022 equivalent of $25.00 a pound for high quality roasted coffee.

The point being, it wasn’t all about the weather in Brazil.

There were also several factors that contributed to the lag time before the C-market topped out at $3.36 ($15.41) on April 14, 1977 rather than the summer of 1976 when a dramatic shortfall in the Brazilian harvest would have been apparent. First, when the black frost hit Brazil two-thirds of the coffee had already been harvested and most of the cherries that remained on the trees could still be picked and processed. The world produced a whopping 80 million bags of coffee in 1974 compared to 63 million in 1973, replenishing the surplus and Brazil’s stockpiles of perhaps 21 million bags. That was not unusual. What was unusual was the size of America’s own stockpile, set aside in anticipation of a longshoreman’s strike in 1974 that never happened. Note that common wisdom in these pre-specialty coffee days was that green coffee, properly stored, could remain viable for up to 20 years.

Finally, as often happens when prices begin to climb, in late 1975 coffee producers around the world were incentivized not only to start planting but improve their “husbandry” on existing crops, increasing yields as early as the very next harvest.

Prices bounced around above $3.00 for six weeks in March and April of 1977. Then, mirroring the three month rise from $2.00 to $3.00 from January to March, dropped from $3.00 to $2.00 from May to July. Nevertheless, a dramatic shift had taken place. Green coffee prices would rarely fall below $1.14, double pre-black frost prices, from early 1976 to the summer of 1989, when a voluntary supply quota scheme known as the International Coffee Agreement (ICA) collapsed. Over those 13 years, 3,313 trading days, the C-market closed below $1.14 on just 168 days, one half of one percent of the time.

In 2022 dollars, between 1978 and 1988 the annual average price for green coffee dropped below $3.00 only briefly in 1987. Even immediately after the collapse of the ICA, the average price in 2022 dollars from 1990-1994 ($1.81) was significantly higher than 2016-2020 ($1.33).

Which brings us to the modern day. Why were prices so high throughout much of 2022? They weren’t. Sure, a severe drought and a frost in Brazil, container shortages, fertilizer shortages, shipping bottlenecks, labor shortages at every point in the supply chain, COVID. Yeah, but prices were not high. If you started buying green coffee between the spring of 2012 and the summer of 2021 you entered that bit of business during an elongated valley, when green prices were abnormally low if not truly anomalous, and the truth is the 2022 “peaks” were not very high in the scope of history. If, like the pricing charts in the offices of the Colombian Coffee Federation that ran out of room at $1.20, you acclimatized to an environment where $2.00 was a psychological or budget barrier, most of 2022 was not easy. And yet, this is the business you entered when you started buying green coffee. Always has been.

“History is merely a list of surprises. It can only prepare us to be surprised yet again.”

Kurt Vonnegut

Same as It Ever Was

If there is a green coffee floor price boogeyman, it’s $3.00. Like Voldemort, we don’t really like to talk about it, as if we can keep it at bay by pretending it doesn’t exist. And yet, when we look back over 200 years and adjust for inflation, $3.00 as the floor price for a pound of green coffee is more normal than not.

Although there are a few apples to oranges when we look back at green coffee prices, and perhaps some potential inaccuracies of a few cents here and there when interpreting data, the big picture numbers expressed as annual averages are certain enough going back to 1826. Generally speaking, prior to 1968 and the creation of the C-market, the price for good quality Santos or other coffee from Brazil functioned as the floor price for green Arabica coffee. In the early 19th century, before Brazil emerged to dominate the market, prices were often expressed as simple averages of green coffee sales in New York or average auction prices in Amsterdam, the center of price discovery before the industry matured in America.

Note, from this point, until we reach our concluding section, and it will arrive, all prices will be expressed in 2022 dollars to avoid the awkward parentheticals and more readily convey the relevance of price history. 

Among the earliest green coffee prices recorded are those paid by Jean de La Roque during his travels throughout the Red Sea region from 1708 to 1713. He appears to have paid roughly $15.00 a pound for green coffee in Yemen. This at a time when a cup of coffee was still a considered a luxury in European cities. In his account of those travels, Le Roque describes familiar market dynamics. When the port was crowded with foreign ships, many looking to purchase coffee, prices would go up dramatically. When there were few buyers at the port of Moka, less coffee was brought to market.

Throughout the late-18th and early-19th century the coffee producing world would have been almost unrecognizable to our modern coffee eyes. In Brazil, coffee was still in transition from a garden crop used for local barter and consumption to commercial cultivation for export. Moka coffee from Yemen was still the most prized coffee in the world, but expensive. The largest coffee producing region in the world at that time was the Caribbean. In 1789 green coffee traded for $3.14 a pound.

For the first two decades of the 19th century war and revolution were everywhere. The resulting disruptions to production and shipping caused green coffee prices in Amsterdam to reach $10.00 a pound in 1809, and spike at $22.00 a pound in 1812. Coffee production in the Caribbean would never recover from the collapse of the onerous slave trade, but the oppressive structure of slavery in the West Indies had inspired increased planting in Brazil and other tropical regions where slavery or its functional equivalent remained in place. This cruel legacy still influences the structure of coffee markets to this day. By 1826, Brazil was well on its way to becoming synonymous with coffee, which traded in New York at $4.22 that year. For the next 100 years, the annual average floor price for green coffee would be $3.00 or more 55% of the time. Indeed, this ratio remains constant even when we expand the timeline 196 years to 2021. From 1826 to 2021, and despite the fact that we’ve experienced history’s lowest sustained green prices over the last 3 decades, coffee traded above $3.00 more than 50% of the time. Of the 44 years when the annual average was below $2.00, more than half have occurred since 1990.

Looking at annual averages is helpful in that it tends to exclude temporary swings based on perception or rumor or even organized attempts to corner or influence the market. Thus, the highest and lowest annual prices are almost always accompanied by the oldest and simplest explanation, surely older even than the number of ships at anchor in the port of Moka 300 years ago. Scarcity and surplus.

Abraham Lincoln was, by most accounts, an enthusiastic coffee drinker. At the Smithsonian, one can find the cup from which he drank his last cup of coffee in the afternoon before he departed for Ford’s Theatre. For his entire adult life, Lincoln would have seen little change in the price of coffee. In 1827, the year he turned 18, green coffee traded at $3.90. In 1960, the year he was nominated for president, green coffee traded at $4.03. Apart from seven years in the 1840s when prices dipped below $2.00 due to increased production in both Brazil and the Dutch East Indies (not surprising after the Dutch government made coffee a “mandatory crop” in the 1830s), prices were relatively stable until the Civil War. This level of stability was possible because worldwide increases in production were matched by a steady increase in consumption. During Lincoln’s lifetime, annual per capita coffee consumption in the U.S. rose from three pounds to five pounds.

When volatility did arrive, it was once again a byproduct of war. The government sought to supply each Union soldier with a surprisingly substantial coffee ration of 36 pounds a year. This increase, and somewhat circumstantially artificial demand associated with 2 million soldiers fighting under the most brutal conditions, caused green prices to rise from $4.44 in 1861 to $6.64 in 1863. Prices fell below $3.00 after the war, bottoming out at $1.98 in 1968 in what we recognize now as a familiar and predictable boom/bust cycle. High demand created high prices that lead to planting and when those plantings produced enough coffee to match demand prices dropped. Prior to the Civil War, at least on a global scale, this sort of cycle was less pronounced if not unknown. Increased production was not so much attached to specific price events as it was to the general idea that more is better and growing bigger is necessary. In an era when global communications were dependent on the wind, the relationship between production and prices seemed more a function of magical thinking than market forces outside of local economies.

In the 1870s, when coffee leaf rust disease first attacked Ceylon and other regions, prices jumped from $2.34 to a peak of $5.14 and remained above $4.00 for seven years. More important than the arrival of rust during this decade, from a price perspective, was the emergence of coffee “syndicates” that attempted to control enough supply to impact prices. The coffee industry would endure these overt consumption-side monopolistic experiments for 50 years, until the regulatory environment began to catch up with practice. These market manipulators, wherever they appeared in the supply chain, tended to mask and obscure the underlying boom and bust cycle. This created a distrust and misunderstanding of price fluctuations among stakeholders, especially those outside the supply chain, that lasted for 100 years and included the coffee boycotts of 1977.

What the monopolists didn’t yet understand was that high prices, artificial or otherwise, would create new coffee, incentivizing coffee production beyond almost anyone’s capacity to engage in the prolonged manipulation of supply. Shipments of Brazil Santos alone increased nearly twofold from 629,000 bags in 1877 to 1.2 million bags in 1881.

When artificially high prices caused by monopolistic interventions collapsed in 1881, prices dropped below $2.00. The brokers who were caught with long positions as they attempted to corner the market were holding coffee at a loss and many went out of business. Trading virtually ceased for months as coffee brokers representing $7 million in business closed their doors. This upheaval led to the formation of the New York Coffee Exchange, opened in 1882 in an effort to self-regulate coffee trading.

By the mid-1880s the telegraph had established semi-reliable communication between the U.S. and South America, but it did not guarantee the reliability of information that traveled along its wires. Erratic news from origin caused erratic prices in spurts so short they are rarely reflected in the annual average. For example, mixed news about crop sizes exacerbated by ongoing cabal-like schemes among buyers caused green prices to fluctuate between $2.64 and $6.46 a pound over 10 months in 1887 and 1888. And this was the repetitive story of green coffee prices much of the time during the late-19th and early-20th century: Volatility fueled by real news, fake news, and attempted market manipulation by speculators.

For the 10 years from 1889 to 1898 green coffee prices averaged out to $4.50. For the 10 years from 1899 to 1908 green coffee prices averaged less than half that at $2.13. Over the next 113 years, even with three prolonged anomalies, two high and one low, the adjusted average floor price for green coffee has been, you guessed it, $3.00.

Unlike during the Civil War or the War of 1812, prices did not spike during WWI or WWII because in both instances the government imposed wartime price controls. Although temporary volatility remained an ever-present factor, nothing significant happened price-wise until the 1950s (unless you count Brazil setting millions of pounds of coffee on fire, but that’s a story for another time).

Between 1950 and 1958 the average floor price for green coffee was more than $5.00, peaking at an average of $8.19 in 1954. Not surprisingly, Congress held hearings. The transcripts reveal not only the difficulties in understanding how coffee markets function, but the difficulties in explaining how coffee markets function even among officials from the New York Coffee and Sugar Exchange who often failed to accurately articulate the dynamics of their own industry. Even committee member Prescott Bush (father to future president George HW Bush), no slouch when it came to economics and finance, struggled to grasp the relationship of the supply chain to prices. At the command of President Eisenhower, the Federal Trade Commission launched an investigation and published a 1,000-page report that blamed the same old villains, including Brazil for massively misleading crop reports, and big bad speculators in New York. The report utterly failed to grasp the fact that the Brazilian coffee harvest alternates annually between large and smaller crops, an understanding that would have significantly changed the report’s conclusions.

The second anomalous period, already discussed ad nauseum perhaps, was the 1975 frost in Brazil. Between 1976 and 1980 the average floor price for green coffee was $7.30, peaking at an average of $10.67 in 1977.

The ultimate caveat when looking at green coffee prices and history was nothing short of a disaster commonly known as the “price crisis” of 2000-2004. Following a double frost during the summer of 1994, green coffee prices spiked at $4.65 and then fluctuated wildly between $2.50 and $4.50 through the end of the year. For the next five years prices roamed erratically in the range between $1.75 and $3.50, only occasionally moving beyond those borders. Weirdly and perhaps predictively, the market responded to a severe drought in Brazil with only a very brief and seemingly obligatory rally at the end of 1999, which by that time meant an unimpressive 80-week high of $2.41 before a plunge into darkness.

In 2000, the annual average C-market price for green coffee dropped below $1.46, at or below the cost of production for many coffee producers. Throughout 2001-2002 the average price was 86 cents, below the cost of production for all but the very largest and most highly mechanized coffee farms. Over those two years, prices bottomed out below 75 cents for a total of 34 weeks (note we are still using 2022 dollars, meaning the actual bottom was 54 cents). Some coffee farmers just abandoned their farms. In what can be termed a road to recovery in only the most technical sense, the average price rose to 94 cents in 2003, then $1.14 in 2004.

When prices finally broke gasping above the surface to average $1.55 in 2005, it was only a psychological and arbitrary end to the price crisis. The period of low prices only felt like it was over the way your legs only feel lighter after removing ankle weights. Coffee may have been trading at the 2022 equivalent of $1.55, but these were still among the lowest prices in history. And yet, they were still higher than relative prices from 2016 to 2020, arguably a period of unmatched growth in the number of businesses roasting coffee, businesses that were habitualized to consider an adjusted average market of $1.33 as normal.

“Shop the peripheries of the supermarket; stay out of the middle.”

Michael Pollan

Coffee on the Periphery

History teaches us that coffee prices can be volatile, certainly; but more to the point, in recent decades green coffee has been relatively inexpensive. Even with the C-market breaching $2.50 in early 2022, coffee prices have still remained historically low when we adjust for inflation. Setting aside the coffee price crisis of 2000-2004, the five years from 2015 to 2020 saw the lowest sustained green coffee prices in history. Indeed, prior to the collapse of the ICA in 1989, prices above $3.00 in today’s dollars was normal.

But let’s stop adjusting for inflation at this point and use the actual historical prices to see if the point still stands. Over the last 30 years there have been almost 8,000 trading days. Over those days, coffee has traded above the psychological barrier of $2.00 only 7% of the time. Coffee has traded below $1.00, below the cost of production for virtually all coffee farmers, 31% of the time. For every day that the market closed over $2.50, there is more than one day that it closed under 50 cents (147 days versus 168 days respectively). Coffee prices hit $3.00 or higher for a total of just 3 days over the last 30 years.

As noted, this is not really helpful information if you started buying green coffee after 2015 and your bank and budget are built around an average actual C-market price of $1.21. But history also teaches us that roasters hate raising prices. Even the very largest of the large coffee roasters had to hold their noses as they raised prices repeatedly following the black frost of 1975.

Coffee is an agricultural product, after all. Although it can always be found on a center aisles in the supermarket, it belongs on the periphery with the produce, meat, and dairy products. Walking into a grocery store any given week, coffee drinkers should be as unsure about the price of coffee as they are about the price of eggs or spareribs or tomatoes. As an industry, we’ve not done consumers any favors by distancing them from the agricultural inevitabilities of coffee price fluctuations. The true value of coffee is so plainly evident when we look back over time, and yet to so many who drink it each and every day, the real price of coffee remains a mystery.

Mike Ferguson (@aboutferguson) is an American coffee professional and writer based in Providence, Rhode Island.  Read more Mike Ferguson on Sprudge.

Categories
Brazil

Can New Coffee Hybrids Save The Amazon From Deforestation?

When you think of coffee in Brazil, chances are you assume it was brought here by boats, arriving first on the coast. But the true story is less known: coffee actually first entered Brazil in 1727 through the Amazon jungle.

The far distance of this date speaks to just how fascinated people have been with coffee across the centuries. For it was this year—1727—when Lieutenant Colonel Francisco de Mello Palheta was appointed by Brazil’s colonial power, Portugal, to (unofficially) bring coffee seeds to Brazil from the neighboring colony of French Guiana. This route ran not through the shorelines, but directly through the jungle. Shortly thereafter coffee was first cultivated in Pará, a state in the Amazon region; in the years after coffee’s cultivation in Brazil spread through other, better-known regions, especially Minas Gerais and São Paulo, which together make most of Brazil coffee exports today.

Nearly 300 years later the coffee world’s attention in Brazil is not focused on the Amazon, but coffee *does* still grow there, though it rarely makes the news. These days most of the international news you hear about the Amazon rainforest features our not-so-environmentally-friendly environment minister, who since the beginning of his mandate has been systematically dismantling environmental protections, contributing to the surge of a 12- year high in the scale of deforestation in 2020. This minister even called on the government to push through further deregulation of environmental policies last year, when people were distracted by the coronavirus.

This is an important story from the Amazon, but it is not the *only* story from the Amazon. I took a closer look at a group of coffee producers in Rondônia, a state in the Amazon region, where the production of Canephora—a coffee species commonly known as Robusta —is on the rise, with results that might offer an alternative to deforestation in the region.

In a 19-year period, the coffee production area in Rondônia has decreased by 77%, while productivity has risen from eight to 32 sixty-kilo bags per hectare. Embrapa (the Brazilian Agricultural Research Corporation) researchers argue that if coffee productivity is advantageous, deforestation won’t seem appealing to farmers, providing an alternative to deforestation industries like cattle ranching and soybean cultivation.

Canephora Robusta

Coffee production in Rondônia started in the 1970s with immigrants from Espírito Santo, Minas Gerais, and Paraná (states from the south and southeastern regions in Brazil), attracted by the federal government’s motto at the time: integrar para não entregar, or, “to integrate not to give in”. The military considered the region’s territorial occupation an issue of national security, and development efforts that included agricultural incentives, roadbuilding schemes, and mineral extraction rapidly took place. Initially, the producers started cultivating Arabica coffee but gradually switched to Conilon (another variety of the Canephora species) from Espírito Santo, and later to robusta, for its adaptability to high temperature, high humidity growing environments.

In 2019 Embrapa made available 10 new hybrid cultivars of Conilon and Robusta (both Canephora cultivars), promising to reach at least three times more productivity than the current ones being used in that area. The research indicated that Conilon stands out for its small size and greater tolerance to water stress, but it has less resistance to coffee rust. Robusta, in turn, has greater resistance to the rust disease and nematodes, and also greater potential for a finer cup (a topic discussed at length in this interview). From genetic crossing they obtained new cultivars, expressing the best characteristics of the two varieties.

Canephora coffee cherries.

The Matas de Rondônia region is comprised of 15 municipalities, each of which are now proving they can dramatically increase coffee production without the need for deforestation. The forecast for the 2020/2021 harvest is over 2.3 million bags, produced in a planted area 78% smaller than in 2001. The region is flat and there is practically no winter season, and the average temperature ranges from 23 to 26 degrees Celsius, which is perfect for Canephora cultivation. According to Enrique Alves, Ph.D. in agricultural engineering and researcher at Embrapa, Amazonian robustas produce almost twice as much as arabicas on average in the region. Rondônia produces around 96% of all coffee grown in the Brazilian Amazon region, and around 17 thousand families currently work with coffee farms, with an average farm size of only four hectares—small for Brazilian standards.

Alves adds enthusiastically that they are about to receive the Geographical Indication (IG) for the Matas de Rondônia Region and its Amazonian robustas. The Geographical Indication, according to the National Institute of Industrial Property (INPI), attests when a certain characteristic or quality of a product or service is due to its geographical origin. “This will be the first IG for robustas in the world,” he tells me.

Canephora coffees have long been stigmatized, and it’s a complex topic. For many, Robusta, in particular, remains synonymous with low-quality instant coffee and cheaper blends. But Enrique Alves tells me there is a new window of opportunity for producers in the region: the so-called fine Amazonian robustas.

Canephora Robusta roasted coffee

“A fine Robusta will have balanced sweetness, acidity, and body,” he tells me, “while Arabicas could be brighter and with more delicate bodies.” In fact, many roasters in Brazil are already featuring Amazonian Robustas on their shelves. Rodrigo Torii, a media professional, and former roaster based in Manaus, tells me he was getting samples from within Amazonas state but there was nothing special about them. “Until the day a friend introduced me to a Robusta from Rondônia, then I realized something there was different. It had controlled acidity and quite pleasant fruity notes.” At the same time, Torii pitched the subject to James Hoffmann’s YouTube channel, and now Torii’s video is available to Hoffmann’s global audience.

Another roaster who has been working with Rondônia indigenous producers is Leo Moço, who used Robusta during the 2019 Brazilian barista championship aiming “to break the prejudice between Arabica and Robusta in the specialty coffee market,”—his words during his presentation at the championship, where he placed second. This was the very first time that a Robusta coffee was featured in a barista championship in Brazil. The lot used was from the São Luís indigenous land within the Alta Floresta d’Oeste municipality, about 370 miles from the capital of Rondônia—produced by Valdir Aruá.

Moço mentioned at the beginning of his work with the Aruá family and other indigenous tribes that the idea was to eventually showcase their coffee at a barista championship, imagining it would take a few years for that to happen. But he told me as soon as he tasted the lots of the first harvest after the beginning of his work with them, he had to use the coffee. According to Moço, it was a balanced Robusta with a slight bitterness and notes of cocoa nibs, dark chocolate, and whiskey. The lot went through the Sprouting Process, a term coined by Moço for a special fermentation process in which freshly harvested beans are placed in a plastic drum without oxygen for 15 to 20 days and away from sunlight, inhibiting the development of fungi and bacteria. Moço states that this environment will make it easy for enzymes to break down coffee sugars, and it has been crucial in helping not only indigenous producers but the majority of Rondônia producers to improve the quality of their lots.

Since then, the Aruá indigenous family has continued to stand out in Robusta quality contests. The Aruá family had been working with coffee for 18 years, but before participating in competitions coffee for them was just another source of income. Now they see it as way of living. The 22-year-old producer Tawã Aruá won third place in the state quality and sustainability contest in 2020, following the steps of his father, Valdir Aruá, who, in 2018, took second place in the same contest.

Enrique Alves

Enrique Alves at Embrapa emphasizes that despite the appalling news on deforestation, there needs to be caution when one approaches the subject, as there has always been a multi-layered relationship between agriculture and forest. “We can’t be naive and say that the world’s food production was not based on deforestation. This has always been a reality,” he adds. “There is a big difference between sustainable food production and environmental degradation.” Alves maintains that Brazil has countless good and bad examples, and his work’s goal through Embrapa is to encourage a new model of integrated and sustainable agricultural production, one that incorporates different combinations between the agricultural, livestock, and forestry components.

Canephora’s role in the future of Brazilian rainforest health is only just beginning to be understood, but the potential is enormous—for the wildlife, the natural environment, the tens of thousands of coffee-growing families, and yes, for those who love a delicious cup of coffee.

Juliana Ganan is a Brazilian coffee professional and journalist. Read more Juliana Ganan on Sprudge.

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Brazil

Inside The Movement For Brazil’s Landless Agriculture Workers

In 1996, in the south of Minas Gerais state in Brazil, the Ariadnópolis sugarcane mill went bankrupt, failing to pay and fulfill its obligations with all of its employees at the time. With no money and nowhere to go, the employees occupied the mill area, where they started living and organizing themselves in an agricultural community, along with members of the Movimento dos Trabalhadores Rurais Sem Terra (MST), or Landless Agricultural Workers’ Movement, who arrived in that area in that time and the following year.

Although Brazilian agriculture ranks among the most modernized in the world, especially in the field of export crops such as soybeans, orange, sugarcane—and since we are on the subject, coffee—land concentration, or the ownership of large amounts of land by very few people, is alive and well throughout the five regions in our country. Land concentration has in fact been on the rise, according to the latest rural census released in 2018, which shows the contrast between large (over 1,000 hectares) rural properties versus small ones (smaller than 10 hectares). At the beginning of 2018, large farms accounted for merely 1% in number, that is, only 51,203 farms represented 47.6% of the total farmland in the country (up 2.6% from the last census, in 2006). On the other hand, small farms represented in number 50% (or roughly 2.5 million) of the total number of farms in the country but accounting for only 2.3% of the total farmland.

Since it was founded, in 1984, the MST has occupied plots of land throughout all five geographic regions of Brazil. The criteria, according to them, is straightforward: such land should be deemed unproductive and/or abandoned. The occupied areas are, in the majority of the cases, owned by banks or large landowners. The movement stands against monoculture and genetically modified crops, seeking social justice through agrarian reform. Throughout its existence, its members have clashed with large landowners, and mainstream media has often portrayed MST as a threat to private property, giving emphasis to violent episodes of clashes between its members and large landowners especially in the North and Midwest regions of the country.

At the same time, many smaller legalized settlements have been providing food for school programs, and also exporting crops as part of large coops, something that many conservative parties in congress prefer not to acknowledge. The rising influence of the ruralista lobby in congress and Brazil’s dependence on agricultural commodity exports helps echo the theory that the landless movement is a threat to the country’s main economic engine, agribusiness exports.

Now that we have set a bit of a background to our history, let’s go back to Ariadnópolis, in the south of Minas Gerais, a state world-renowned for its fine coffees.

Today, many of the mill’s former employees produce coffee in the area where the sugarcane mill was previously located. Since it is a mountainous area and the farmers do not use any sort of agrochemicals and harvest manually, the overall coffee quality is good but they have been mostly selling it as commercial coffee as they don’t have the knowledge to grade the lots. According to the Movement, today 2,400 people live in the dam area, cultivating around 500 hectares of coffee. They have been trying to resist and remain in the land, although the previous owner of the mill has presented in court a plan to rebuild and financially recover the land that includes leasing it to a major landowner who already cultivates coffee in the neighboring areas and sells to multinational food giants.

A woman who goes by T.T. has been part of the Movement since 1997, when her mother was settled in Campo do Meio, the city where the mill is. T.T. explains that the region has been divided into three settlements: the Primeiro do Sul settlement with 40 families, the Santo Dias settlement with 48 families, and the Nova Conquista settlement with 13 families; and one large camp area, the Quilombo Campo Grande, where 450 families are living off the land. The settlement areas have been granted to those families by law, whereas the Quilombo area is still being disputed in court by the former mill owners.

T.T. tells me that the Quilombo Campo Grande was born out of the bankrupted Ariadnópolis mill and that around 2,000 of its employees went on strike to occupy the land and started using it to grow coffee and other food crops straight away. Many of them had previous experience with coffee having worked as seasonal pickers in the region, so coffee seemed a logical crop choice despite the four-year wait to have their first commercial harvest. Besides coffee, today they have a variety of commercial crops in the area such as corn, peanuts, pineapple, and guava, as well as fruits and vegetables for their own consumption.

In 2012, T.T. and other 30 agroforestry coffee farmers established their cooperative, and with that, their coffee brand, that today is called Guaii coffee. Today, the Guaii co-op as a whole produces more than 15,000 60-kilo bags per year, having more than two million producing coffee trees. They just managed to plant more than 500,000 new coffee trees in the end of 2019, which should start producing around 2023. T.T. stresses that the main goal of the co-op is to help farmers from the region in the transition from merely organic to agroforestry, in a partnership with the Federal Institute of Machado. They’ve also started producing organic peanuts, sesame seeds, and raw brown sugar, but coffee is their main product under the Guaii brand, where 300 families are involved. “Guaii is our dream to have a good coffee, collectively produced in an agroforestry system, being distributed at fair prices to all Brazilians, specially to the working class,” says T.T.

In order to accomplish that dream, they needed help. R.N., a coffee professional from São Paulo, had her first contact with Guaii coffee at the Armazém do Campo outpost in São Paulo. Armazém do Campo is a grocery shop that offers organic and agroecological products that come from the Landless Movement settlements throughout Brazil. She was then invited to revamp the coffee service at the grocery shop but ultimately realized there was no way to fix their coffee service unless she went to origin and tried to sort quality issues together with producers at the origin, that is, at the Quilombo Grande site.

“Guaii producers did not have a thorough comprehension of what is specialty coffee, and divided their coffee into three main commercial blends (Guaii popular, Guaii sustainable and Guaii organic), based solely on screen size and with no regard for cup quality, which is a pity because they had really good coffee out there,” says R.N. The idea going forward is to separate the coffee based on quality and sell it better, and with the income generated train the farmers from the coop on how to cup and sort their own coffee, and also buy basic equipment for the coop.

In parallel, in São Paulo, some coffee shops and coffee professionals formed an informal alliance in order to, together, come up with better practices in terms of hiring minorities, reducing waste, discussing current political issues that could affect the coffee community, and so on. So, R.N. facilitated with them in order to have the coffee produced by the coop shipped to São Paulo and then roasted by N.B., a roaster based in the capital. Each coffee shop then commercialized the coffee to their customer base being very open about the origin of the coffee. The first bags were already acquired by Por Um Punhado de Dólares, Takko Café São Paulo, and KOF cafés in São Paulo and sold under the MST label, in an attempt to show specialty coffee consumers that the landless movement also can produce quality coffee and also that their agricultural goods are not a taboo, as many Brazilians still prefer to believe. They exist, they are legally commercialized, and they can even reach high-quality coffee shops that dare show their customer base their political stance on the subject. This is a big deal: introducing a specialty coffee produced by a Landless Movement community is a way of making the theme mainstream for many Brazilians who still see the movement as anarchic or just plain wrong. These cafes made a bold move when they made the decision to overtly sell coffee from the Movement.

Things haven’t been easy for R.N. though: “When you are working with farmers who are constantly threatened for their lives or their land, it’s very hard to get things done in a reasonable timeframe. Simple tasks, like getting them to ship some samples, get postponed because they have much more crucial things to worry about, such as a trial coming up or an unexpected visit from a neighbor farmer.”

“The Landless Movement in Brazil, in my point of view, goes beyond the subject of land concentration—a heritage from our colonial past—but also does something rare nowadays: affordable, organic, quality food, readily accessible in the cities. If you think about it,” says R.N., “that is revolutionary. And that is why it is so scary to large landowners and the big Agro,” she pauses.

“I mean, imagine what they could do if they had more resources in hand?”

Juliana Ganan is a Brazilian coffee professional and journalist. Read more Juliana Ganan on Sprudge.

*Names have been changed at the request of the individuals